Cost Management Paper 4


Finley Painters Co., a painting contractor, maintains a job-order cost system. Job costs are accumulated by tracking the actual cost of paint and other materials used on each job, as well as the actual cost of wages earned by the painters on each job. In addition, overhead is applied to each job by using a predetermined rate based on the actual painters’ wages. Leonard Wayne, painter, earned $168 today by working on Job 08-45. In computing prime cost and conversion cost for Job 08-45, how would the wages earned today by Wayne be classified?


Rose Co.’s fixed manufacturing overhead costs totaled $150,000 and variable selling costs totaled $75,000. How should these costs be classified under variable costing?


All of the following would be considered manufacturing overhead costs by a book publisher except


An assembly plant accumulates its variable and fixed manufacturing overhead costs in a single cost pool, which is then applied to work in process using a single application base. The assembly plant management wants to estimate the magnitude of the total manufacturing overhead costs for different volume levels of the application activity base using a flexible budget formula. If there is an increase in the application activity base that is within the relevant range of activity for the assembly plant, which one of the following relationships regarding variable and fixed costs is true?


Which one of the following categories of cost is most likely not considered a component of fixed factory overhead?


The difference between variable costs and fixed costs is


Which of the following is the best example of a variable cost?


A company has the following budget formula for annual electricity expense in its shop: Expense = $7,200 + (Units produced × $0.60) If management expects to produce 20,000 units during February, for the purpose of performance evaluation, what amount of expenses should the company expect to incur in February?


The sum of the costs necessary to effect a one-unit increase in the activity level is a(n)


Scott Company uses the following formula for annual maintenance costs:
Total cost = $6,000 + $0.70 per machine hour
The current month’s budget is based on planned machine time of 30,000 hours. Monthly maintenance cost included in this budget is


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